Pinkerton: The U.S.-China Competition: Cyberspace and Outer Space

Second in a Series…

In our first installment, we noted that in the distant past, China had invented key technologies—for war-fighting and ocean-voyaging—and yet had failed effectively to develop them.

For China, those choices were a calamity of epic proportions, because other countries soon glommed onto that know-how—and used it against China.  As a result, China suffered a decline that stretched over five centuries; only in the last few decades has that downslope been reversed—and, as we all know, reversed dramatically.

So now let’s consider the possible fate of another country, the United States.  In the 20th century, America invented many important technologies; we will dwell on two of them.  As we shall see, the U.S. chose to develop effectively one of these technologies, but not the other.  So could the U.S. today be making the same sort of mistake that China made in the past?  We’ll likely know the answer to that question sometime in this century, but even now, the early warning signs are ominous.

Let’s start with the technology that we developed effectively: the Internet.

On October 28, 1969, the first e-mail was sent on the ARPANET link between UCLA and Stanford University.  (“ARPA” stood for the Pentagon’s Advance Research Projects Agency, which had financed the effort for the previous six years.)

Indeed, for most of the following two decades, the Internet, as it came to be called, was financed entirely by the public sector—the Defense Department, as well as the National Science Foundation.

Yet then Uncle Sam chose to do something ingenious: Having deployed public resources to create the Internet, the feds then turned it over to the private sector.  Thus by 1989, when a company known as Quantum Computer Services rebranded itself as America Online, the Net was flourishing as a platform for the most brilliant of capitalist exuberance.   (As an aside, we might recall that Uncle Sam had earlier used this same model—public investment, followed by privatization— for other key industries, including shipbuilding, radio, aviation, and radar.)

Indeed, as to the Internet, the government has long been maintaining its protective watch.  For example, back in 1983, the Federal Communications Commission ruled that phone companies (mostly, AT&T) could not levy “access charges” on data—as distinct from voice—transmissions.  This decision was little noticed at the time, but it was, in fact, a huge deal, as Reed Hundt, chairman of the FCC under President Clinton, conceded in his memoir.  As Hundt put it, that “far-sighted, or accidentally smart” ruling by the FCC in ’83 enabled the Net to blossom. “In the absence of the FCC’s decision,” Hundt wrote, “the Internet would have been so expensive that [founder Marc] Andreesen’s Netscape would not have been a hiccup, much less one of the first bubble stocks of the Internet.”

To tell the story Hundt’s way is to describe the FCC’s role in fostering the Net as an unalloyed good.  To tell it another way, the FCC forced AT&T to host, on the cheap, a rival industry—namely, digital—on its network.  In law, that process of governmental imposition is sometimes referred to as a “taking.”

And yet either way the story is told, we can see the results in the humongous Internet of today: The U.S. made a profound choice, and it had a profound impact.

Next we can cite another example of the government giving the Net a boost: In 1998, Bill Clinton signed the Digital Millennium Copyright Act, which included a “safe harbor” provision for Internet Service Providers, immunizing them from legal liability for the actions of Internet users.  We can immediately note that most other industries have no similar safe harbor; if a consumer misuses their products, the companies can be held legally liable.

Indeed, we might pause to reflect on the immensity of this safe harbor provision: If, say, Google were to be held liable for every copyright violation found on its site, it wouldn’t be in business today.  To put this matter another way, through deliberate legislation, the government presided over the transfer of billions, if not trillions, of dollars of copyrights, from holders to users.

Moreover, e-commerce firms have generally not been subject to state and local sales taxes, even as, of course, traditional “bricks and mortar” retailers must collect the tax.  For better or for worse, this exemption has given Net-based companies an enormous advantage over its more traditional rivals.

Thus we can see: Internet companies, over the last few decades, have benefited from a kind of “industrial policy.”  Governments at all levels have adopted policies that have favored the Internet industry.

Today, while there’s plenty of controversy about Net companies and their effect on America, it’s undeniable that overall, these policies have worked as intended—in 2017, we have a lot of Internet.  In fact, nearly nine in ten Americans use the Internet regularly, and Net companies, plus related tech companies, are the richest firms in the U.S.

Yet if the Internet began in the U.S., it didn’t stop there: The power of the Net was quickly diffused around the planet.  It is, after all, the World Wide Web.

Most notably, China’s tech companies, too, are surging.  Strictly speaking, that country is not a full part of the WWW, because the government’s Great Firewall of China blocks much access.  And yet still, China’s cyberspace is flourishing.

To be sure, Internet penetration in China is much less than in the U.S., only about 53 percent.  Yet even so, in a country of 1.37 billion people, Internet users amount to more than 700 million.  In other words, China has an enormous market, which the Chinese government has protected from foreign competition.  Thanks to that sheltering mechanism—typically labeled as a “non-tariff barrier,” indigenous Chinese companies, such as Alibaba, Baidu, and Tencent, have flourished.  While they are still smaller than Amazon, Facebook, and Google, they are technologically at or near par, and they are growing fast

Of course, there are other, less savory, aspects of the Internet.  For instance, on the subject of computer hacking, the Chinese might well be the world’s leaders—even more so than the Russians.  Newt Gingrich has said that China’s hacking of U.S. intellectual property costs our country $360 billion a year, while another estimate, admittedly from an anti-Beijing source, puts the cost to the U.S. at $5 trillion a year.

In view of those statistics, it’s fair to ask: Will the U.S. be able to keep any sort of lead?  And in addition, is the U.S. safe from an overt future hack attack—an electronic Pearl Harbor?

In the meantime, here’s a statistic to consider: China makes 90 percent of the world’s computers, including virtually all of them sold in the U.S.—even those used, more and more, by the Department of Defense.

And speaking of computers, China continues to make quantum leaps in futuristic computer hardware.  Last year it was reported that China has built the world’s fastest supercomputer—and built it entirely without U.S. computer chips.  In the words of Computerworld:

There is no U.S.-made system that comes close to the performance of China’s new system, the Sunway TaihuLight.  Its theoretical peak performance is 124.5 petaflops . . . A petaflop equals one thousand trillion (one quadrillion) sustained floating-point operations per second.

The new computer, the article continued, can be used for “advanced manufacturing, earth systems modeling, life science and big data applications.”  Indeed, according to a worried U.S. Chamber of Commerce, China intends to leverage its high tech into overall economic dominance in the 21st century.

And oh yes, such economic dominance would allow for rapid gains in nuclear weapons technology and other kinds of military technology.  One might ask: What other kinds of “miltech”?  Answer: One day, we’ll find out.

Thus we can conclude: Whereas the Chinese of half-a-millennium ago made the drastic mistake of neglecting technology, they’re not making that mistake any more.  So even though the U.S. started with an enormous early lead, the People’s Republic is catching up fast—and may even surge ahead.

Indeed, the rest of the world must be wondering whether China, which led the world in technology for most of the last five thousand years, is now in the process of reasserting its historic global edge.

So at minimum, we can conclude that America is in a serious competition with the Chinese.  We might call it the cyberspace race.  Such competitive racing among nations doesn’t have to end in war, although it’s a bleak lesson of history that oftentimes national rivalry does, in fact, end in confrontation, if not outright conflict.

Thus for the sake of our national security, including economic security, it would seem imperative that the U.S. should be striving hard to both stay secure and stay ahead.  As we saw in the first installment, the national price of falling behind is too painful to contemplate.

So with that injunction—failure is not an option, or at least it darn well shouldn’t be—let’s resolve not to let the American technological achievement of the Internet be dissipated into global mediocrity and weakness.

Okay, so now let’s turn from cyberspace to outer space.   That is, from the infinitely small to the infinitely large.

Interestingly, just as the hinge year for cyberspace was 1969—when that fateful first electronic message was sent—the same year was a banner year for outer space.

I’m referring, of course, to the moon landing: On July 20, 1969, the command module Columbia of the Apollo 11 mission, carrying two astronauts, Neil Armstrong and Buzz Aldrin, set down on the lunar surface.  Back on earth, billions of people watched it happen, live on TV.

In the long run, the moon landing might well have been, as Armstrong said, “one giant leap for mankind,” but in the short run, it was a giant leap for the USA.  It was our technology, our achievement, our glory—and our moon.

In those days, everybody knew about the moon landing, and NASA, while almost nobody knew about ARPA.

Yet almost immediately thereafter, interest in, and support for, the space program took a tumble.  We had been there and done that, the thinking went, and so now we must move on to other things—mostly, to address “unmet needs” down on earth.  And so, amidst massive national apathy, the last American astronaut trod the moon’s surface in 1972.

In the decades since then, several U.S. presidents, including Donald Trump on April 24, have talked about returning to the moon, or even going to Mars.  But there’s been no definitive vision, and no determined plan along the lines put forth by President John F. Kennedy, who pledged, back in 1962, that the U.S. would become “the world’s leading space-faring nation.”

Today, in fact, a grand total of two Americans are currently in space.  That’s two out of more than 324 million Americans.  In other words, we aren’t at all, as JFK had hoped, a spacefaring nation.  (In fairness, no other country is, either: The world’s total spacefaring population—all aboard the International Space Station—is a mere five.)

Still, for the U.S., once the unquestioned leader in space, the question arises: In losing interest in space exploration, is the U.S. making a mistake today akin to the mistake that the Chinese made in the 15th century, when they stopped their long-distance oceanic expeditions?   That does seem like a highly pertinent question.

To be sure, some will protest that another, less ambitious, aspect of the space program is doing just fine: namely, the orbital satellite business.  That business is indeed huge; according to one recent estimate, there are more than a thousand satellites orbiting the earth, some for surveillance, most for communication, and a few for various kinds of zero-g research and development.  And yes, there are a few for military purposes—more on that later.

As a matter of fact, there are also a handful of satellites orbiting the sun and other planets.  Indeed, worldwide, the industry now spends several hundred billion dollars a year, and new companies are entering the space biz all the time, including, recently, Apple.

Yet of course, all those satellites aloft don’t just belong to the U.S.  No fewer than 12 countries—including such avowed enemies as Iran and North Korea—have independently launched satellites.  In addition, the European Union, which numbers 28 countries, has its own robust orbital space program.

So on the one hand, it’s cool that so many countries have space programs, and yet on the other hand, such space proliferation is a reminder that the U.S. hardly has space to itself anymore.  Once again, American know-how has been spread all over.  Once again, we face serious competition.

And of those competitors, China is the most serious.  Indeed, it’s possible that China could overtake us.  The People’s Republic has announced that it hopes to get an unmanned spacecraft to Mars by 2020, and it’s reported that China hopes to send taikonauts to the moon later in that same decade—which is to say, not long from now.  If America doesn’t get off its national fanny, we could be aced in space.

Moreover, it’s also been suggested that China might team up with Russia to build a new space station of its own.  And what might the purpose of that space station be?  Would it be for peaceful science?  Or military science?  And what is the U.S. doing in the meantime?   What will be the world be like if the world knows everything we know—or maybe even more?

We’ll take up those questions in the next installment.

Next: The Strategic Imperative of the High Frontier


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